IASIS Healthcare Announces Second Quarter Results.Business Editors/Health/Medical Writers FRANKLIN Franklin, cities, United States Franklin. 1 City (1990 pop. 12,907), seat of Johnson co., S central Ind., inc. 1823. It is a farm trade center. Manufactures include auto parts, aluminum doors and windows, and copper panels. , Tenn.--(BUSINESS WIRE)--May 2, 2003 IASIS Healthcare Iasis Healthcare LLC owns and operates hospitals in Arizona, Florida, Texas, Utah and Nevada. The company, based in Franklin, Tennessee, owns 15 hospitals. It also operates a Medicaid insurance plan in Arizona. (R) Corporation today announced results for the second fiscal quarter and six months ended March 31, 2003. Net revenue for the quarter ended March 31, 2003, increased 11.0% to $271.4 million compared with $244.4 million in the same quarter of last year. Earnings before interest expense, gain on sale of assets, minority interests, income taxes, depreciation and amortization, loss on debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. and cumulative effect of change in accounting principle (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) for the second quarter increased 7.6% to $41.1 million compared with $38.2 million in the prior year period. Net earnings were $10.9 million for the quarter ended March 31, 2003, compared with net earnings of $12.7 million in the same prior year period. In the second quarter of fiscal year 2003, the Company recorded a $3.9 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of deferred financing costs associated with the Company's refinancing Refinancing An extension and/or increase in amount of existing debt. of its previous credit facility. In commenting on the quarterly results, David R. White, chairman, president and chief executive officer of IASIS, said, "I am pleased with another strong quarter of volume and net revenue growth. In addition, we enjoyed a record quarter from an operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. standpoint The Standpoint is a newspaper published in the British Virgin Islands. It was originally published under the name Pennysaver, largely as a shopping-coupon promotional newspaper, but since emerged as one of the most influential sources of journalism in the . Our continued improvement in operating results is being driven, in part, by a focus on our key initiatives, which include growing profitable product lines, investing in new technologies and physician recruiting and retention." Net revenue for the six months ended March 31, 2003, increased 13.1% to $526.2 million compared with $465.3 million in the same period of last year. EBITDA for the first half of fiscal year 2003 increased 16.5% to $74.2 million compared with $63.7 million for the same period in fiscal 2002. Net earnings for the six months ended March 31, 2003, were $18.4 million compared with net earnings of $13.0 million in the same period of last year, excluding the cumulative effect of a change in accounting principle of $39.5 million related to the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142. Same facility net patient revenue per adjusted admission increased by 8.0% and 7.4% for the quarter and six months ended March 31, 2003, respectively, compared with the same prior year periods. Same facility hospital admissions and adjusted admissions for the quarter ended March 31, 2003, increased from the prior year period by 5.0% and 5.5%, respectively. Same facility hospital admissions and adjusted admissions for the six months ended March 31, 2003, increased from the prior year period by 6.4% and 7.5%, respectively. At March 31, 2003, the Company's net working capital was $82.6 million compared with $90.1 million at December December: see month. 31, 2002, after the effect of the refinancing of the credit facility. Net accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying increased $200,000 from $155.7 million at December 31, 2002, to $155.9 million at March 31, 2003. Days of net revenue outstanding was 57 at March 31, 2003, compared with 59 at December 31, 2002, excluding Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. settlement accounts. Cash flows from operating activities for the quarter and six months ended March 31, 2003, were $43.8 million and $52.1 million, respectively, compared with $27.9 million and $29.5 million, respectively, in the prior year period. No amounts were outstanding under the Company's revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility at March 31, 2003, compared with $29.5 million outstanding at December 31, 2002. During the quarter ended March 31, 2003, the Company refinanced its senior bank credit facility. The new $475 million credit facility consists of a $125 million, five-year revolving credit facility and a $350 million, six-year term loan, with borrowing rates generally consistent with the previous credit facility. Proceeds from the new credit facility were used to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. amounts outstanding under the Company's previous credit facility and to fund closing and other transaction related costs incurred in connection with the refinancing. A listen-only simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. and 30-day replay of IASIS Healthcare Corporation's second quarter conference call will be available by clicking the "For Investors" link on the Company's website at www.iasishealthcare.com beginning at 11:00 a.m. Eastern Time on May 2, 2003. A copy of the Company's Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. (including the press release) will also be available on the Company's website. IASIS Healthcare(R) Corporation, located in Franklin, Tenn., is a leading owner and operator of acute care hospitals and develops and operates networks of medium-sized Me´di`um-sized` a. 1. Having a medium size; as, a medium-sized man s>. Adj. 1. medium-sized - intermediate in size medium-size, moderate-size, moderate-sized hospitals in high-growth urban and suburban markets. The Company operates its hospitals with a strong community focus by offering and developing healthcare services to meet the needs of the markets it serves, promoting strong relationships with physicians and working with local managed care plans. Currently, IASIS Healthcare(R) owns or leases 14 hospitals with a total of 2,116 beds in service. These hospitals are located in four regions: Salt Lake City, UT; Phoenix, AZ; Tampa-St. Petersburg Petersburg, city (1990 pop. 38,386), politically independent and in no county, SE Va., on the Appomattox River; inc. 1850. A port of entry and an important tobacco market, it has industries producing chemicals, pharmaceuticals, furniture, structural steel, lumber, , FL; and three cities The Three Cities is a collective description of the three fortified cities of Cospicua, Vittoriosa, and Senglea on the Island of Malta, which are enclosed by the massive line of fortification created by the Knights of St John, the Cottonera Lines. in Texas, including San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. . IASIS Healthcare(R) also operates three ambulatory surgery centers ambulatory surgery center A free-standing center that performs various types of surgery and a Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. managed health plan that currently serves over 60,900 members in Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). . For more information on IASIS Healthcare(R) Corporation, please visit the Company's website at www.iasishealthcare.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws, which are intended to be covered by the safe harbors Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. created thereby. These forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations including, but not limited to, the discussions of our operating and growth strategy (including possible acquisitions and dispositions), projections of revenue, income or loss, and future operations. Forward-looking statements involve risks and uncertainties including, without limitation, those associated with our ability to negotiate favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. contracts with managed care plans; the highly competitive nature of the healthcare industry; possible changes in Medicare and Medicaid Medicare and Medicaid U.S. government programs in effect since 1966. Medicare covers most people 65 or older and those with long-term disabilities. Part A, a hospital insurance plan, also pays for home health visits and hospice care. reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. levels and other federal or state healthcare reforms; future cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. initiatives undertaken by purchasers of healthcare services; our ability to attract and retain qualified management and personnel, including physicians and nurses; our ability to service our significant indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. ; the effect of existing and future governmental regulations, including the Balanced Budget Balanced budget A budget in which the income equals expenditure. See: budget. balanced budget A budget in which the expenditures incurred during a given period are matched by revenues. Act of 1997, the Balanced Budget Refinement Act of 1999 and the Medicare, Medicaid and SCHIP SCHIP State Children's Health Insurance Program Benefit Improvement and Protection Act of 2000; the impact of possible governmental investigations; our ability to use our information systems effectively; our limited operating history; our ability to successfully manage the risks of our Medicaid managed care plan, Health Choice; our ability to successfully complete and integrate acquisitions of other companies or facilities; general economic and business conditions; and those risks, uncertainties and other matters detailed in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended September September: see month. 30, 2002, and from time to time in our filings with the Securities and Exchange Commission. Although we believe that the assumptions underlying the forward-looking statements contained in this press release are reasonable, any of these assumptions could prove to be inaccurate, and, therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, you should not regard the inclusion of such information as a representation by the Company or any other person that our objectives and plans will be achieved. We undertake no obligation to publicly release any revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to any forward-looking statements contained herein to reflect events and circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of unanticipated events.
IASIS HEALTHCARE CORPORATION
Condensed and Consolidated Statements of Operations (Unaudited)
(in thousands)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
------- -------- -------- --------
Net revenue $271,436 $244,424 $526,201 $465,305
Cost and expenses:
Salaries and benefits 94,153 80,318 182,952 158,045
Supplies 37,768 34,705 73,451 65,998
Other operating expenses 78,289 73,578 155,703 143,155
Provision for bad debts 20,154 17,591 39,865 34,365
Interest, net 13,131 14,036 26,448 28,539
Depreciation
and amortization 12,682 11,180 25,533 21,668
Loss on debt
extinguishment 3,900 -- 3,900 --
-------- -------- -------- --------
Total costs
and expenses 260,077 231,408 507,852 451,770
-------- -------- -------- --------
Earnings before gain on
sale of assets, minority
interests, income taxes
and cumulative effect of
a change in accounting
principle 11,359 13,016 18,349 13,535
Loss (gain) on sale
of assets, net -- -- (780) 7
Minority interests 421 301 699 524
-------- -------- -------- --------
Earnings before income taxes
and cumulative effect of
a change in accounting
principle 10,938 12,715 18,430 13,004
Income tax expense -- -- -- --
-------- -------- -------- --------
Net earnings before
cumulative effect of
a change in accounting
principle $10,938 $12,715 $18,430 $13,004
Cumulative effect of a change
in accounting principle -- -- -- (39,497)
-------- -------- -------- --------
Net earnings (loss) $10,938 $12,715 $18,430 $(26,493)
======== ======== ======== ========
EBITDA (1) $41,072 $38,232 $74,230 $63,742
======== ======== ======== ========
EBITDA margin (1) 15.1% 15.6% 14.1% 13.7%
(1) EBITDA represents earnings before interest expense, gain on sale
of assets, minority interests, income taxes, depreciation and
amortization, loss on debt extinguishment and cumulative effect
of change in accounting principle. Management routinely
calculates and communicates EBITDA and believes that it is useful
to investors because it is commonly used as an analytical
indicator within the healthcare industry to evaluate hospital
performance, allocate resources and measure leverage capacity and
debt service ability. EBITDA should not be considered as a
measure of financial performance under generally accepted
accounting principles (GAAP), and the items excluded from EBITDA
are significant components in understanding and assessing
financial performance. A table reconciling EBITDA to net earnings
(loss) is included in this press release under Supplemental
Condensed and Consolidated Statements of Operations Information.
EBITDA should not be considered in isolation or as an alternative
to net income, cash flows generated by operating, investing, or
financing activities or other financial statement data presented
in the consolidated financial statements as an indicator of
financial performance or liquidity. EBITDA, as presented, may not
be comparable to similarly titled measures of other companies.
IASIS HEALTHCARE CORPORATION
Condensed and Consolidated Balance Sheets
(in thousands except share amounts)
March 31, Sept. 30,
2003 2002
-------- --------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $6,362 $ --
Accounts receivable, net of
allowance for doubtful accounts
of $39,095 and $34,450, respectively 155,935 154,452
Inventories 23,996 23,909
Prepaid expenses and other current assets 14,993 15,697
Assets held for sale 22,106 22,106
-------- --------
Total current assets 223,392 216,164
Property and equipment, net 415,679 402,171
Goodwill 252,204 252,397
Other assets, net 34,459 27,751
-------- --------
Total assets $925,734 $898,483
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $48,543 $47,061
Salaries and benefits payable 23,367 21,551
Accrued interest payable 16,754 15,016
Medical claims payable 31,146 30,262
Other accrued expenses and
other current liabilities 15,994 19,023
Current portion of long-term debt
and capital lease obligations 5,032 26,252
-------- --------
Total current liabilities 140,836 159,165
Long-term debt and capital lease obligations 581,741 556,691
Other long-term liabilities 25,691 22,347
Minority interest 3,490 4,736
-------- --------
Total liabilities 751,758 742,939
Stockholders' equity:
Preferred stock - $0.01 par value, authorized
5,000,000 shares; no shares issued and
outstanding at March 31, 2003, and
September 30, 2002 -- --
Common stock - $0.01 par value, authorized
100,000,000 shares; 31,956,113 shares issued
and 31,955,863 shares outstanding at March 31,
2003, and September 30, 2002, respectively 320 320
Nonvoting common stock - $0.01 par value,
authorized 10,000,000 shares; no shares issued
and outstanding at March 31, 2003, and
September 30, 2002 -- --
Additional paid-in capital 450,720 450,718
Treasury stock, at cost, 16,306,541 shares
at March 31, 2003, and September 30, 2002 (155,300) (155,300)
Accumulated deficit (121,764) (140,194)
-------- --------
Total stockholders' equity 173,976 155,544
-------- --------
Total liabilities and stockholders' equity $925,734 $898,483
======== ========
IASIS HEALTHCARE CORPORATION
Condensed and Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended
March 31,
------------------
2003 2002
-------- --------
Cash flows from operating activities:
Net earnings (loss) $18,430 $(26,493)
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization 25,533 21,668
Minority interests 699 524
Cumulative effect of a change
in accounting principle -- 39,497
(Gain) loss on sale of assets (780) 7
Loss on debt extinguishment 3,900 --
Changes in operating assets
and liabilities, net of disposals:
Accounts receivable (1,340) (6,913)
Inventories, prepaid expenses
and other current assets (916) (5,249)
Accounts payable and other
accrued liabilities 6,583 6,431
-------- --------
Net cash provided by operating activities 52,109 29,472
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (36,520) (16,107)
Purchase of real estate -- (55,338)
Proceeds from sales of assets 2,863 149
Change in other assets (1,732) (2,578)
-------- --------
Net cash used in investing activities (35,389) (73,874)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock 2 222
Proceeds from senior bank debt borrowings 454,100 120,300
Payment of debt and capital leases (453,450) (79,673)
Debt financing costs incurred (10,600) (2,347)
Distribution of minority interests (410) --
Other -- (156)
-------- --------
Net cash provided (used) by financing activities (10,358) 38,346
-------- --------
Increase (decrease) in cash and cash equivalents 6,362 (6,056)
Cash and cash equivalents at beginning of period -- 6,056
-------- --------
Cash and cash equivalents at end of period $6,362 $ --
======== ========
Supplemental disclosure of cash flow information:
Cash paid for interest $24,789 $28,937
======== ========
Cash paid (refunded) for income taxes, net $6 $(1,831)
======== ========
Supplemental schedule of noncash investing
and financing activities:
Capital lease obligations incurred
to acquire equipment $3,278 $ --
======== ========
IASIS HEALTHCARE CORPORATION
Segment Information (Unaudited)
(in thousands)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Acute Care Service:
Net patient revenue $235,802 $210,143 $455,527 $399,291
Revenue between segments (1,625) (1,407) (3,533) (2,844)
-------- -------- -------- --------
Net revenue 234,177 208,736 451,994 396,447
Salaries and benefits 92,495 79,047 179,738 155,535
Supplies 37,663 34,608 73,224 65,801
Other operating expenses 44,905 41,002 88,880 79,892
Provision for bad debts 20,154 17,591 39,865 34,365
-------- -------- -------- --------
EBITDA 38,960 36,488 70,287 60,854
Loss on debt extinguishment 3,900 -- 3,900 --
Interest expense, net 13,131 14,036 26,448 28,587
Depreciation and amortization 12,653 11,153 25,471 21,612
Loss (gain) on sale
of assets, net -- -- (780) 7
-------- -------- -------- --------
Earnings before minority
interests, income taxes
and cumulative effect of
a change in accounting
principle 9,276 11,299 15,248 10,648
Minority interests 421 301 699 524
-------- -------- -------- --------
Earnings before income taxes
and cumulative effect of
a change in accounting
principle $8,855 $10,998 $14,549 $10,124
======== ======== ======== ========
Segment assets $922,043 $905,098 $922,043 $905,098
======== ======== ======== ========
Health Choice:
Capitation premiums and
other payments $37,259 $35,688 74,207 $68,858
Revenue between segments -- -- -- --
-------- -------- -------- --------
Net revenue 37,259 35,688 74,207 68,858
Salaries and benefits 1,658 1,271 3,214 2,510
Supplies 105 97 227 197
Other operating expenses 33,384 32,576 66,823 63,263
Provision for bad debts -- -- -- --
-------- -------- -------- --------
EBITDA 2,112 1,744 3,943 2,888
Loss on debt extinguishment -- -- -- --
Interest income -- -- -- (48)
Depreciation and
amortization 29 27 62 56
-------- -------- -------- --------
Earnings before minority
interests, income taxes
and cumulative effect of
a change in accounting
principle 2,083 1,717 3,881 2,880
Minority interests -- -- -- --
-------- -------- -------- --------
Earnings before income taxes
and cumulative effect of
change in accounting
principle $2,083 $1,717 $3,881 $2,880
======== ======== ======== ========
Segment assets $3,691 $20,060 $3,691 $20,060
======== ======== ======== ========
IASIS HEALTHCARE CORPORATION
Financial and Operating Data (Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Number of hospitals at
end of period 14 14 14 14
Licensed beds at
end of period 2,590 2,507 2,590 2,507
Beds in service at
end of period 2,116 2,085 2,116 2,085
Average length of stay (days) 4.56 4.40 4.48 4.29
Occupancy rates for
same facilities
(average beds in service) 51.8% 48.3% 48.5% 44.2%
Admissions 21,650 20,621 41,684 39,179
Same facility % change 5.0% 6.4%
Adjusted admissions 35,299 33,466 69,396 64,531
Same facility % change 5.5% 7.5%
Patient days 98,677 90,630 186,825 168,122
Adjusted patient days 154,458 142,367 297,760 268,782
Outpatient revenue as a %
of gross patient revenue 35.8% 36.1% 36.9% 37.5%
IASIS HEALTHCARE CORPORATION
Supplemental Condensed and Consolidated Statements
of Operations Information (Unaudited)
(in thousands)
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ------------------
2003 2002 2003 2002
-------- -------- -------- --------
Consolidated Results:
Net earnings (loss) $10,938 $12,715 $18,430 $(26,493)
Add:
Income tax expense -- -- -- --
Interest expense, net 13,131 14,036 26,448 28,539
Minority interests 421 301 699 524
Loss (gain) on sale
of assets, net -- -- (780) 7
Cumulative effect of
a change in accounting
principle -- -- -- 39,497
Depreciation and
amortization 12,682 11,180 25,533 21,668
Loss on debt extinguishment 3,900 -- 3,900 --
-------- -------- -------- --------
EBITDA $41,072 $38,232 $74,230 $63,742
======== ======== ======== ========
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